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News release

HASBROUCK HEIGHTS, NJ

New Jersey Industrial Market Continues to Stabilize in Second Quarter 2011

Encouraging signs foster cautious optimism, rents expected to rise over next 12 months


HASBROUCK HEIGHTS, N.J. (Aug. 15, 2011) — Despite mixed data, encouraging signs are fostering cautious optimism in both the Northern and Central New Jersey industrial real estate markets, according to Jones Lang LaSalle. The firm’s second quarter 2011 New Jersey industrial market report shows that the state’s industrial market is moving toward stabilization, buoyed by new construction projects, the recent Port Newark lease extension, and strong investor activity.

“We’re pleased to see indicators that point towards further stabilization in both the Northern and Central New Jersey industrial property markets,” said Rob Kossar, Managing Director at Jones Lang LaSalle. “While there are some disparities between scattered submarkets, we’re seeing positive momentum in the Meadowlands and port markets in Northern New Jersey, and increased activity and investment in Central New Jersey. Overall, we are cautiously optimistic and forecast that asking rents in both markets will increase over the next 12-months.”

While net absorption in Northern New Jersey slipped into negative territory (-1,051,531 square feet for Q2), this was driven by the introduction of several new large (more than 100,000 square feet) blocks of space. Interest in the Meadowlands submarket persists, with a number of new construction projects underway.  New construction activity was also seen in Fairfield, along with substantial projects breaking ground in the port area. Strong long-term growth is anticipated particularly in the port area, where the Port Authority recently signed a 20-year lease extension at the Port Newark Container Terminal (PNCT). PNCT currently operates a 180-acre terminal facility in Port Newark/Elizabeth and this extension is expected to nearly triple the cargo volume and acreage of the facility by 2030.

In contrast to the negative absorption seen in Northern New Jersey, the Central market saw a spike in net absorption, driven by several large lease signings totaling 2.1 million square feet. Food and third party logistics (3PL) companies spurred much of the activity. As there is no major construction currently underway in Central New Jersey, vacancy rates are expected to drop and asking rents are expected to grow. Additionally, strong investor interest persists throughout the market, with significant activity in the last two quarters.

Other highlights from Jones Jang LaSalle’s second quarter 2011 industrial market report include:
 
  • The overall vacancy rate for New Jersey was 9.3 percent at the end of Q2 2011. The vacancy rate at the end of Q1 2011 was 9.4 percent.
  • Average asking rents in New Jersey were $4.93 at the end of Q2 2011, compared to $4.96 at the end of Q1 2011. Average asking rents in Northern New Jersey were $5.47 at the end of Q2 2011, down 1 cent from the end of Q1 2011. Average asking rents in Central New Jersey were $4.22 at the end of Q2 2011, down .07 cents from Q1 2011.
  • There were 197 industrial lease deals executed, including new leases and lease renewals, in New Jersey during Q2 2011. Industrial transactions in Q2 2011 totaled 5.98 million square feet.

Jones Lang LaSalle’s team of in-house research professionals compiled the Jones Lang LaSalle Q2 2011 New Jersey industrial report, which provides an extensive analysis of the New Jersey industrial property market.

Jones Lang LaSalle’s Industrial Services Group is the leader in industrial real estate services in New Jersey based on total leasing transaction volume.

Jones Lang LaSalle in New Jersey employs 525 of the region’s most respected commercial real estate industry experts.  The firm offers office and industrial Brokerage, Tenant and Landlord Representation, Project and Development Services, Property Management, and Capital Markets services to its clients in New Jersey.

About Jones Lang LaSalle
Jones Lang LaSalle (NYSE:JLL) is a financial and professional services firm specializing in real estate. The firm offers integrated services delivered by expert teams worldwide to clients seeking increased value by owning, occupying or investing in real estate. With 2010 global revenue of more than $2.9 billion, Jones Lang LaSalle serves clients in 70 countries from more than 1,000 locations worldwide, including 200 corporate offices.  The firm is an industry leader in property and corporate facility management services, with a portfolio of approximately 1.8 billion square feet worldwide. LaSalle Investment Management, the company’s investment management business, is one of the world’s largest and most diverse in real estate with $45.3 billion of assets under management. For further information, please visit our website, www.joneslanglasalle.com.